SREC Markets Explained: Which States Pay You for Solar Production

Most solar incentives are one-time: a rebate at installation, a tax credit at filing, an exemption you barely notice on a bill. SRECs — Solar Renewable Energy Certificates — are different. They pay you on an ongoing basis, for as long as your system keeps producing electricity, in states that have built a market for them.

How an SREC market actually works

Many states require electricity suppliers to source a growing share of their power from renewable sources — a Renewable Portfolio Standard (RPS). Some of those states go further and carve out a specific solar requirement within that standard, called a "solar carve-out." To prove compliance, utilities need certificates, and your rooftop system can generate them: one SREC is issued for every megawatt-hour (1,000 kWh) of solar electricity your system produces, regardless of whether you use that electricity yourself or export it to the grid.

You can then sell that certificate — separately from the electricity itself — to a utility or broker that needs it to meet its solar carve-out requirement. The price is driven by supply and demand: tighter solar carve-out targets and less available solar capacity generally push prices up; oversupply pushes them down.

Which states have active markets, and roughly what they pay

| State / market | Program type | Approximate 2026 value per certificate | |---|---|---| | Washington, D.C. | Traditional SREC market | Highest in the country — roughly $350–$450, driven by an aggressive renewable target and a small, supply-constrained market | | New Jersey | SuSI (successor to legacy SRECs), fixed-rate for new systems | ~$85, fixed for 15 years under the current program; older "legacy" SRECs may trade higher on the open market | | Massachusetts | SMART program (not a traditional SREC market, but a similar per-kWh production payment) | Fixed rate reviewed annually, generally a modest per-kWh adder rather than a spot-market SREC price | | Maryland | Traditional SREC market | Roughly $40–$60, with a temporary multiplier for some residential systems installed under recent state legislation | | Illinois | Illinois Shines / Adjustable Block Program, fixed 15-year contracts | Roughly $75–$90 per certificate-equivalent, fixed for the contract term | | Pennsylvania, Ohio, Delaware | Traditional SREC markets, generally lower value | Often in the low double digits to under $10, depending on the state and current supply | | Virginia | RPS-driven REC compliance market | Value varies; check current broker pricing |

A few states without their own market — including parts of Indiana, Kentucky, Michigan, and West Virginia — allow eligible systems to sell into Ohio's market instead, depending on utility and location rules. Most other states, including large solar markets like California, Texas, Florida, and New York, rely on other incentive types (net metering, rebates, tax credits) rather than an SREC market.

What a typical system actually earns

A 10 kW residential system produces roughly 11–13 SRECs per year in a sunny climate, fewer in a cloudier one. Here's what that looks like in three different markets.

| Market | Certificates/year (approx.) | Price per certificate | Estimated annual income | |---|---|---|---| | Washington, D.C. | 12 | ~$400 | ~$4,800/year | | New Jersey (SuSI, fixed) | 12 | ~$85 | ~$1,020/year, fixed for 15 years | | Maryland | 12 | ~$50 | ~$600/year | | Ohio | 12 | ~$5 | ~$60/year |

The spread is enormous — a homeowner in D.C. can earn roughly 80 times more per certificate than one in Ohio for producing the exact same amount of electricity. This is the clearest illustration in the entire state-incentive landscape of why "solar incentives" can't be summarized as a single national number.

What to know before counting on SREC income

• It's taxable. SREC income is generally treated as ordinary taxable income, unlike some rebates. Keep records of what you sell and when.
• You typically need to register. Systems usually need to be registered with a state tracking system (like PJM-GATS for the mid-Atlantic region or NEPOOL-GIS for New England) before certificates can be issued and sold. Most installers handle this as part of installation, but confirm it's included.
• Prices move. Unlike a fixed rebate, spot-market SREC prices (as opposed to fixed-rate programs like SuSI or Illinois Shines) fluctuate with supply and demand — some homeowners choose to pre-sell or lock in a fixed multi-year price through a broker for certainty, trading potential upside for predictability.
• Leased systems usually don't qualify. SRECs generally belong to whoever owns the solar system — if you have a lease or PPA, the third-party owner typically collects the SREC income, not you.
• Selling frequency varies by state. Some states process sales once a year; others allow it twice a year, which affects how quickly certificates convert to cash in your pocket.

FAQ

Do I automatically receive SRECs once my system is installed? No — your system generally needs to be registered with the relevant state tracking system first. Most installers handle this registration, but confirm it's part of your installation package rather than assuming it is.

What happens to my SRECs if I sell my house? Since solar panels typically transfer with the home sale, future SRECs generally go to the new owner going forward — but confirm this with your specific state program and any existing broker contract, especially if you've pre-sold or locked in a multi-year price.

Can I choose not to sell my SRECs? Yes, though there's usually no financial reason not to, since selling doesn't affect your electricity usage or your other incentives. One tradeoff: selling SRECs typically means you can no longer make certain "100% solar-powered" marketing or carbon-reduction claims about that electricity, since you've sold the associated renewable attribute.

Is a fixed-rate program like New Jersey's SuSI or Illinois Shines the same as a traditional SREC market? Not exactly — these are performance-based incentive programs modeled on the SREC concept, but they pay a locked-in rate for a set contract term rather than fluctuating with an open market, which trades some potential upside for predictability.

Continue reading: state solar incentives now that the federal credit has expired and state battery storage incentives.

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